Thirty-five years later, sugar workers are still in the same boat

Dec 22, 2009 Features / Columnists, Peeping Tom

When the PNC Government passed the Sugar Levy Act in 1974 its primary purpose was to siphon off resources that had been earned by the industry to help support the expanding bureaucratic state machinery which was heavily politicised and which was reeling from the effects of a steep increase in oil prices.
But it was also intended to drive the final nail in the coffin of the sugar barons who quickly realized that with this levy it was time to get out of Guyana and to do with the best deal possible.
They got out in 1976 on the back of generous compensation.The real losers were not those that had pillaged Guyana for years and had enslaved and exploited the labour force.
The real losers were the workers of the industry whose defiance in the thirteen-week strike in 1975 had forced recognition of the union of their choice and who with nationalization had hoped that they would enjoy a greater share from the sugar industry.
The manner in which the accounting worked ensured that this levy was taken not after profits but before profits. This meant that profit sharing by the workers was undermined since the levy reduced the profits.
GAWU then, in 1977, proceeded on a 135-day strike to address this issue of outstanding profit sharing and the effect of the Sugar Levy on this process. The strike ended without any gains for the workers.
There were three main effects of the imposition of the levy. The first was that it robbed the workers of a greater share in the profits in the corporation and in fact when it was creamed off in later years and the corporation showed losses, there was nothing to be given to the workers.
The second problem was that the sugar industry was in need of capitalization since after the end of the Second World War the sugar barons placed little emphasis on recapitalizing the industry.
The creaming off of a significant chunk of sugar revenues by the State in the form of the levy this denied both the foreign owners and the government of the resources from within the industry which could have been pumped back for the future capitalization of the sugar corporation.
The third effect was the mismanaged PNC State became more highly dependent on the levy. The financial mismanagement was so acute that without this levy, the State would have been unable to fund the little that it was doing in terms of development.
By the time the PPP came to power, this levy had formed a significant proportion of the finances of Central Government. At this time also, the country was paying in excess of nine out of every ten dollars in debt payments and thus there was little to attend to the needs of development.
As such the immediate restoration of the levy to the sugar industry would have been a recipe for riots since public sector workers would not have been able to be paid.
The PPP administration however committed to the principle of phasing out the levy and in the early years of the Cheddi Jagan administration it reduced, significantly, the size of the levy it was extracting from the sugar industry.
After the death of Cheddi even though the finances of Central Government continued to improve, it took some time for the levy to be totally phased out. That was done I believe in 2003 and marked the end of one of the most controversial taxes ever instituted in Guyana.
Today, with falling sugar revenues due, the industry can do with every cent that it can obtain and this is why it is such a relief that the PPP Government has finally after all the years been able not just to stabilize the finances of the country but also in doing so to end the levy and thus avoid extracting this from an industry badly in need of funds.
But for the workers, the situation remains the same. Even without the levy, they are now confronted with a situation whereby the corporation is not making money and even more dismal is even finding it difficult to finance increases granted to sugar workers.
For this reason, there needs to be a serious reexamination of the finances of the corporation so that these can be improved so that the sugar workers who strove so hard to keep the industry alive in hard times can finally receive what they deserve.
After thirty five years, the sugar workers still cannot enjoy profit- sharing.

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Thirty-five years later, sugar workers are still in the same boat

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